US President Donald Trump has cancelled his upcoming meeting with Russian President Vladimir Putin, citing Russia's seizure of Ukrainian vessels.

"Based on the fact that the ships and sailors have not been returned to Ukraine from Russia, I have decided it would be best for all parties concerned to cancel my previously scheduled meeting in Argentina with President Vladimir Putin," Mr Trump wrote on Twitter.

"I look forward to a meaningful Summit again as soon as this situation is resolved!"

US President Donald Trump has cancelled his upcoming meeting with Russian President Vladimir Putin, citing Russia's seizure of Ukrainian vessels. (AP)Just hours earlier, Mr Trump signalled he would be still meeting Mr Putin at the G20 summit in Argentina Saturday (local time). (AP)

Just hours earlier, Mr Trump signalled he would be still meeting Mr Putin at the G20 summit in Buenos Aires, Argentina Saturday (local time).

The declaration marks a departure from much of Mr Trump's past dealings with Mr Putin. Throughout his presidency, Mr Trump has sought to improve relations despite tensions over election meddling, arms control and the war in Syria.

But Russia's stepped-up action in the Kerch Strait, stemming from its years-long occupation of Eastern Ukraine, threw another contentious issue into the mix.

Ukrainian soldiers take a position near Urzuf, south coast of Azov sea, eastern Ukraine. (AP)Ukraine has confirmed a Russian Su-30 fighter jet and a Ka-52 attack helicopter were involved in the attack. (AP)

Ukraine claims a Russian Su-30 fighter jet and a Ka-52 attack helicopter were involved in the attack and that Russia has blocked 35 merchant ships from leaving or entering the Sea of Azov. The Kremlin has denied interfering with ship traffic.

Ukrainian President Petro Poroshenko is meanwhile arguing for further pressure being put on Moscow.

Mr Poroshenko has urged NATO in a Bild newspaper interview published Thursday (local time) to deploy naval ships to the Sea of Azov "in order to assist Ukraine and provide security".

Ukraine's president Petro Poroshenko asked parliament to impose martial law, something the country has not done before. (AAP)German Chancellor Angela Merkel confirmed she plans to press Russian President Vladimir Putin at this weekend's G20 summit about his country's seizure of three Ukrainian ships and their crews. (DPA)

Mr Poroshenko also called for the cessation of construction of the Nord Stream 2 pipeline.

The pipeline is being built under the Baltic Sea and would bypass Ukraine to deliver gas from Russia directly to Germany.

German Chancellor Angela Merkel confirmed she plans to press Russian President Vladimir Putin at this weekend's G20 summit about his country's seizure of three Ukrainian ships and their crews.

Ms Merkel told a Ukrainian business summit in Berlin on Thursday that Germany is urging the release of the ships and crews and that she would confront Putin at the summit.

She added "we can only resolve this in talks with one another because there is no military solution to all of these conflicts".

Ms Merkel however confirmed she won't back off plans for a joint pipeline with Russia, while pledging to ensure Ukraine remains a transit country for Russian natural gas.

Mr Trump and Mr Putin met in Helsinki in July for a summit that many viewed as a low point for Mr Trump's presidency. He was widely criticised for failing to publicly denounce Russia's interference in the 2016 US election and appearing to accept Mr Putin's denials of such activity.

White House spokeswoman Sarah Huckabee Sanders said Mr Trump also will now speak informally with the leaders of Turkey and South Korea at the summit rather than in formal meetings.

She did not say why the meetings with Turkish President Recep Tayyip Erdogan and South Korean President Moon Jae-in had been downgraded.